Monterey mayor says sales tax increase needed

Monterey Mayor Chuck Della Sala, center, fields questions after his State of the City speech Tuesday morning. Sam Phillips, president of the Monterey Commercial Property Owners Association, right, moderated the event, which also included interim City Manager Mike McCarthy, at left.

Monterey Mayor Chuck Della Sala began a gentle push for passage of a sales tax increase Tuesday as he delivered his annual State of the City address.

Della Sala, saying Monterey cannot afford to slide into mediocrity by ignoring street repairs and other infrastructure needs, told about 90 people at the Monterey Conference Center that the city now has the lowest sales tax rate of any community in the county.

If Monterey voters approve a tax increase — possibly in November — Della Sala said, the city would be the last to raise its sales tax rate to boost revenues.

His comments came before members of the Monterey Commercial Property Owners Associations, whose questions indicated the business group may not think the city is doing enough already to shepherd its tax dollars.

President Sam Phillips asked the mayor about the possibility of setting up a business-oriented budget committee to review the budget prepared by staff for the City Council. With 70 percent of the budget going into employee compensation, Phillips suggested there is a built-in conflict with a staff-originated budget.

Della Sala didn't think much of the idea. He said the city is looking for a new finance director and it would take a lot of time and education to brief members of a budget committee about the city's complex finances.

He encouraged members of the association and public at large to participate in budget deliberations and to bring their concerns to the City Council.

"You elected the council to represent the greater interests of the community," Della Sala said.

As for a sales tax measure, Della Sala said, it is up to city residents to inform city leaders whether they favor going ahead with one.

But after hearing the city faces deficits totaling $2.5 million in the next two years without revenue increases, Della Sala said, "We could limp along without an increase in sales tax."

He said the city has reduced its workforce from 550 to 400 employees during his seven years as mayor.

"We have really tightened our belts, and it's time we have a new revenue stream," he said

Other highlights of the event:

· Della Sala declined to take a stand on a bid for public ownership of the Monterey Peninsula's water purveyor. He said he and other Peninsula mayors want the most cost-effective water desalination project, despite who owns it.

· The mayor congratulated Monterey hoteliers for agreeing to a self-taxation system to pay for a $32 million renovation of the Monterey Conference Center. Ballots have been mailed to hotel property owners and will be counted in February.

· Stressing the critical $1 billion industry generated by the military in Monterey County, Della Sala said he will ask other Peninsula cities to help pay for consulting work to protect the Defense Language Institute and Naval Postgraduate School from the next round — 2017 — of federal base closures and realignments.

· Della Sala hedged just a fraction when asked if he will be running for re-election as mayor in November. He said he still enjoys serving as mayor and will continue to run "as long as I am enjoying this position."

· One of two finalists to become Monterey's next city manager has taken a job with another California city. Interim City Manager Mike McCarthy said the council will decide its next move at an executive session next week.